I just read a great book – George Kamel’s Breaking Free From Broke. I recommend it for everyone, especially:
- young adults
- anyone heading into college
- anyone looking to buy a car
- anyone with credit card debt
This book is full of practical thoughts and advice. It’s motivating and includes inspirational background information about financial institutions that really makes sense.
One nugget is about becoming a SMART spender by asking yourself questions in the areas of:
- Self Awareness
- Motive
- Affordability
- Research
- Timing
Self-Awareness
“Will this purchase add value to my life?”
Ask this question about items, clothing, trinkets, tech gadgets, food, and drinks. Every purchase must serve a purpose. Can you rent or borrow the gadget instead? Do you really need an $8 cup of coffee? Does spending your money in this way add value to your life?
Motive
“Am I buying this for the right reason?”
High pressure, slick marketing or seller deadlines may push us to buy things we don’t need. We may buy things because of our mood: “It’s been a hard day, I deserve a treat.” Or because we feel a need to impress someone. Here’s a great question: “If no one will see my purchase, do I still want it?” Test your motive for spending money.
Affordability
“Is this in my budget?”
If we answer these questions correctly, theoretically, we wouldn’t be in debt. We should never be spending money we don’t have on things we don’t really need to survive.
Research
“Is this the best option, price, retailer?”
Often, this step will help us stay away from impulse buying. Always ask yourself, “Can I get this at a better price elsewhere?” Compare, shop around, and check online. My wife is great about this. She always says, “Oh, that’s nice. Let’s remember that price, think about it a little bit, and check around.” Research will save you from buying junk and purchasing things you realize you don’t need after giving it some thought. Research helps tremendously when making larger purchases, and it works for smaller ones, too.
Timing
“Is now the right time to buy?”
If you spend this money on this item, what are you saying “no” to buying later? Are you dealing with debt you’re trying to get rid of? If so, now may not be the time to buy something for fun. Are you saving for a trip or a car? Then the timing of another big purchase may not be good in the long run.
“SMART” Spending Benefits
Building the discipline of buying “SMART” will help you live more freely and generously. It will keep you from having too much stuff. It will keep your focus on the crucial things in life – faith, relationships, peace of mind and heart – and other things money can’t buy. It will decrease your stress of not having enough.
There was so much great stuff in this book, and you can pick up a copy here.
Listen To Podcast Episode #161
